4 December 2019
The institutional representative of over 45 million businesses has today issued a call for major public policy reforms to scale financing to meet global climate and sustainability challenges.
In an open letter to finance ministers, the International Chamber of Commerce has set out a comprehensive 10 point plan to better align the governance of the financial system with the objectives of the 2015 Paris Agreement and the United Nation’s (UN) Sustainable Development Goals (SDGs). The unprecedented intervention from a major business group comes amid growing concern about persistent financing gaps to support the implementation of global sustainability objectives.
In the open letter ICC Secretary General John W.H. Denton AO writes:
“Governments and regulatory bodies undertook an impressive and concerted programme to address the failings of the financial system in the wake of the 2008 financial crisis. A comparable decade-long action agenda with concrete outcomes is now required to enable the financial system to address global sustainability challenges – most notably the growing climate emergency.”
ICC has outlined 10 policy levers that could be deployed to scale sustainable finance, drawing on a series of consultations with major financial institutions and corporations through the world. Recommendations include: broadening central bank and regulatory mandates to include sustainability objectives; embedding sustainability in credit and regulatory risk calculations; and empowering consumers to make sustainable investment decisions aligned with their values.
Mr Denton concludes the call to action noting:
“Taken together – and in conjunction with existing voluntary efforts from financial institutions – we believe that this suite of policy measures has the ability to shift financial flows definitively towards mitigation and adaptation-related investments, as well as the SDGs. We urge governments to give consideration to how you can advance this agenda at the global level… as well as considering appropriate national interventions.”
The letter was issued ahead of critical climate finance discussions at the ongoing UN climate conference in Madrid (COP25) — at which ICC is leading engagement of the private sector.
Speaking upon the release of the letter, Mr Denton added:
“We see a clear disconnect between the public policy objectives of Paris and the SDGs and the aims of contemporary financial regulation. Having spent 10 years fixing the financial system, it’s now time to enable the financial system to fix the world.
“This requires a holistic rethink of regulatory frameworks to ensure that investment incentives align with the global imperative to tackle climate change and drive sustainable development.”